National legislation – to each their own

The twin of this RES-Directive is CHP-Directive 2004/8/EC¹ which sets up the basis for the promotion of cogeneration. Basically the member states are obliged to set up effective support schemes (Art. 7) to safeguard the certification of electricity from cogeneration (Art. 5) and to monitor and report the effect of the measures towards the Commission (Art. 10 and 11).

The taxation of energy products and electricity is regulated in Council Directive 2003/96/EC². The member states have to introduce levels of taxation which may not be lower than the minimum levels prescribed by Article 7 and Annex I of the Directive. Exemptions for certain energy products, electricity origins or uses are defined in Articles 2 and 14-19.

Thus, currently no fewer than 15 EU Directives, Decisions, and Regulations on the ETS, on the promotion of RES-electricity and CHP-electricity as well as on taxation of energy products and electricity are in effect. This obviously means considerable complexity for the EU and its bodies, for the member states, and for the affected companies within the different industry sectors. The liberalisation of the gas and electricity markets within the Community with the two respective Directives 2003/54/EC³ and 2003/55/EC⁴ has not even been mentioned so far, although at least the liberalisation of the electricity markets can be regarded as being supportive or even an enabler for indirect effects of emission trading to industrial electricity customers. The complexity increased when on May 1^st 2004 ten and on January 1^st 2007 two more countries acceded to the EU. In principle, they had to adopt EU legislation on that date. While in some political fields, the EU has taken pressure off these countries by granting transition periods to develop corresponding national legislation (e.g., on energy taxation), they are fully involved in the ETS which now covers all 27 member states.

combustion of fossil fuels for heat and electricity generation. The liberalisation of the gas and electricity markets also affects the effectiveness of emission trading. This interaction of laws on these political instruments is the case for the EU legislation, as it is the case for all national legislation of the 27 member states as the respective EU Directives and Decisions have been implemented in about 15 to 25 laws and regulations by country. This adds up to approximately 500 national laws and regulations aimed at or seriously affecting climate protection. As the comparison of national legislation is not an objective of this investigation, presenting or comparing all these legal acts will be avoided. Opposed to this matrix of comparisons, two slices of this legislation will be examined in the following sections. In the first, a vertical slice of all national legislation aimed at or seriously affecting climate protection of one member state will be examined. Germany has been chosen as the case example. In the second, a horizontal slice of the main features of the 25 respectively 27 national allocation plans, the core acts of national emission trading legislation, will be compared.

As far as the EU legislation is concerned, the German emission trading laws and regulations need to be put into the context of the general climate protection legislation. The oldest and at the same time most often amended German law aimed at the limitation or reduction of all kinds of emissions is the Federal Emission Control Law (Bundes-Immissionsschutzgesetz¹) which was adopted in 1974. Although the German Government assigned its first minister for the environment in 1986, there was no legislation dedicated to the prevention of global climate change until 1998 apart from this Federal Emission Control Law which is a purely regulatory instrument. The petroleum tax was designed as an indirect tax (consumption tax) without any clear ecological intention. With the change in the German Government to a red-green coalition in 1998, one year after the Kyoto Protocol and two years ahead of the EU Commissions Green Paper on greenhouse gases, climate protection climbed higher on the agenda. However, it was a long time until the first dedicated laws on emission trading were adopted. Initially, the new government went for a double strategy. On the one hand, it renewed and accentuated the Climate Protection Agreement (Klimaschutzvereinbarung²) with the central associations of German industry. This agreement had been closed in 1995 and renewed in 1996 with the previous government. While industry agreed upon certain specific and later absolute emission reductions in CO2 and the other Kyoto gases, the government guaranteed not to enforce the targets by political law if the commitments were implemented successfully. This agreement was last renewed and extended by the promotion of CHP in 2001. On the other hand, in parallel to this voluntary commitment of German industry, the government started implementing the eco-tax reform in 1999.

1 Gesetz zum Schutz vor schädlichen Umwelteinwirkungen durch Luftverunreinigungen, Geräusche, Erschütterungen und ähnliche Vorgänge (Bundestag of the Federal Republic of Germany, 1974)

2 Vereinbarung zwischen der Regierung der Bundesrepublik Deutschland und der deutschen Wirtschaft zur Klimavorsorge (Bundesregierung of the Federal Republic of Germany et al., 2000)

The first step in the eco-tax reform was the Law for Introduction into the Eco-Tax Reform¹ introducing the Electricity Tax Law (Stromsteuergesetz) and amending the Petroleum Tax Law (Mineralölsteuergesetz) in March 1999. The income from this new eco-tax is used to support the national pension insurance system. Already in December 1999, the eco-tax rates had been increased with the Law for Continuation of the Eco-Tax Reform². In 2002, the next amendment came with the Law for further Development of the Eco-Tax Reform³. Finally, the taxation of fuel and electricity was amended by the Law for Reorganisation of Fuel Taxation and Amendment of Electricity Tax Law on July 15^th 2006⁴, replacing the former Petroleum Tax Law by the new Energy Tax Law in Article 1 and amending the Electricity Tax Law in Article 2. To date, the reimbursement conditions are EUR 512.50 retention and 95%

reimbursement of the excess of eco-tax over saved contributions to pension insurance. While the ordinary electricity tax rate is 20.50 EUR/MWh, the reduced rate for industry is 12.30 EUR/MWh, whereof typically about 2 EUR/MWh remain after deduction of savings on pension insurance. Taxation of fossil fuels is less concise as there is a wide range of fuels and tariffs, on the one hand, and "Mineralölsteuer" consists of an "old" component which is an indirect tax without any ecological intention and a "new" component which is the eco-tax component. Both are treated differently in the reimbursement.

In parallel to the eco-tax reform, the government introduced promotion mechanisms for RES and CHP. The first law to promote green electricity was the Renewable Energy Sources Act⁵ of March 2000 which was last amended in July 2004⁶. The vertices of the Renewable Energy Sources Act are the obligation of electricity grid operators to connect turbines generating electricity from renewable energy sources (§ 4) and defined feed-in tariffs for all kinds of green electricity (§§ 5-11). Though, feed-in tariffs are paid only if the boiler, respectively turbine, is operated with bio-fuels only. The supplementary Biomass Regulation⁷ defines details concerning the fuels which count as renewable energy sources. According to the Renewable Energy Sources Act, each electricity customer is obliged to take a certain per-centage of green electricity from the grid (in 2005 it was 10.2%). The customer is charged a

1 Gesetz zum Einstieg in die ökologische Steuerreform (Bundestag of the Federal Republic of Germany, 1999a)

2 Gesetz zur Fortführung der ökologischen Steuerreform (Bundestag of the Federal Republic of Germany, 1999b)

3 Gesetz zur Fortentwicklung der ökologischen Steuerreform (Bundestag of the Federal Republic of Germany, 2002c)

4 Gesetz zur Neuregelung der Besteuerung von Energieerzeugnissen und zur Änderung des Stromsteuergesetzes (Bundestag of the Federal Republic of Germany, 2006b)

5 Erneuerbare-Energien-Gesetz as Article 1 of the Gesetz für den Vorrang Erneuerbarer Energien (Erneuerbare-Energien-Gesetz – EEG) sowie zur Änderung des Energiewirtschaftsgesetzes und des Mineralölsteuergesetzes (Bundestag and Bundesrat of the Federal Republic of Germany, 2000)

6 By the Gesetz zur Neuregelung des Rechts der Erneuerbaren Energien im Strombereich (Bundestag of the Federal Republic of Germany, 2004b)

7 Verordnung über die Erzeugung von Strom aus Biomasse (Biomasseverordnung – BiomasseV) (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2001) latest amended by Erste Verordnung zur Änderung der Biomasseverordnung of August 9^th 2005 (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2005)

regulated fee of 5.50 EUR/MWh on all electricity purchased, respectively 91.40 EUR/MWh on the green electricity purchased (approximately equalling the average feed-in-tariff for RES electricity). According to a hardness clause in the Renewable Energy Sources Act (§ 16), the charge for green electricity can be capped for industrial customers. The cap is 0.50 EUR/MWh for all industrial customers (referring to total electricity purchase) who consume more than 10 GWh and have electricity costs exceeding 15% of total value-added. This cap usually comes into play for pulp and paper manufacturers. The latest amendment to the Renewable Energy Sources Act has been the First Law amending the Renewable Energy Sources Act¹.

The twin law of the Renewable Energy Sources Act is the Cogeneration Act² of March 2000 amended by the Law for the Maintenance, the Modernization, and the Extension of Co-generation³. The latter rules the electricity grid operator's obligation to connect cogeneration turbines. The sales price of electricity from cogeneration consists of a negotiable base price which includes the grid costs avoided, plus a regulated premium (§ 4). The premium ranges between 15.30 EUR/MWh and 51.10 EUR/MWh and decreases over time (§ 7). It is bound to physical transfer of the electricity to avoid a sell-and-buy-back of electricity which is used internally. The electricity grid operators can pass on these costs of subsidizing cogeneration to their end customers. The respective surcharge is 0.50 EUR/MWh but capped at 0.25 EUR/MWh for industrial customers under certain conditions (§ 9).

In 2003, a year after the German ratification of the Kyoto Protocol⁴ and in line with EU Directive 2003/87/EC, the German Government introduced emission trading as a fourth political instrument aimed at reducing greenhouse gas emissions – beside regulation, energy taxation, and subsidisation of RES and CHP. Several drafts of an Emission Trading Law have resulted finally in three laws and two respective regulations. The cornerstone for the German legislation on emission trading is the Greenhouse Gas Emission Trading Law⁵ of July 8^th 2004. This law is the direct implementation of EU Directive 2003/87/EC and sets the framework for the allocation and rules for the actual emission trade. It decides upon the participants (§2), obliges the operators of all affected installations to monitor and report the emissions (§5), defines the character of the allowances (tradeable, valid for one phase etc., §6)

1 Erstes Gesetz zur Änderung des Erneuerbare-Energien-Gesetzes of November 7^th 2006 (Bundestag of the Federal Republic of Germany, 2006a)

2 Gesetz für den Schutz der Stromerzeugung aus Kraft-Wärme-Kopplung (Bundestag of the Federal Republic of Germany, 2000)

3 Gesetz für die Erhaltung, die Modernisierung und den Ausbau der Kraft-Wärme-Kopplung (Bundestag of the Federal Republic of Germany, 2002a) latest amended by Article 170 of Zuständigkeitsanpassungsverordnung of October 31^st 2006 (Bundesministerium der Justiz of the Federal Republic of Germany, 2006)

4 By Gesetz zu dem Protokoll von Kyoto vom 11. Dezember 1997 zum Rahmenübereinkommen der Vereinten Nationen über Klimaänderungen (Kyoto Protokoll) (Bundestag of the Federal Republic of Germany, 2002b)

5 Gesetz über den Handel mit Berechtigungen zur Emission von Treibhausgasen (Treibhausgas-Emissionshandelsgesetz – TEHG) which is Article 1 of the Gesetz zur Umsetzung der Richtlinie 2003/87/EG über ein System für den Handel mit Treibhausgasemissionszertifikaten in der Gemeinschaft (Bundestag and Bundesrat of the Federal Republic of Germany, 2004)

and assigns the Federal Environmental Agency (Umweltbundesamt respectively Deutsche Emissionshandelsstelle) as the relevant authority.

The actual allocation of allowances for phase I, however, was done earlier (March 31^st 2004) by the Federal Ministry for Environment in the National Allocation Plan¹. This plan outlines in detail the principles of allocation of emissions rights down to the level of installations. An overview of these principles will be given later on in this chapter. After its conditional approval by the EU Commission, this NAP became the basis for the respective Allowance Allocation Law 2007² which confirms its guiding principles and basic numbers (allocation target, compliance factor etc.). The supporting Allowance Allocation Regulation 2007³ details the modalities for calculating the emissions. In turn, the 11^th Federal Emission Control Regulation⁴ defines details of the emission declaration and the emission report which the operators of installations subject to German emission trading legislation have to submit to the authorities. Finally, the respective Emission Trading Cost Regulation 2007⁵ entitles the authorities to decide upon charges for all official acts. Based on these three laws and two regulations, emission trading started in Germany on January 1^st 2005.

Meanwhile one further law and one further regulation have been adopted, the draft of the NAP for phase II has been submitted and conditionally approved by the EU Commission, and another law is in preparation. Analogous to EU Linking Directive 2004/101/EC⁶, the Flexible Mechanisms Law⁷ safeguards the crediting of ERUs and CERs earned in Joint Implementation and Clean Development Mechanism actions to German emission trading legislation. Preparation for the compilation of the phase II NAP was supported by the Data

1 National Allocation Plan for the Federal Republic of Germany 2005-2007 (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2004c)

2 Gesetz über den nationalen Zuteilungsplan für Treibhausgas-Emissionsberechtigungen in der Zuteilungsperiode 2005 bis 2007 (Zuteilungsgesetz 2007 – ZuG 2007) (Bundestag of the Federal Republic of Germany, 2004a)

3 Verordnung über die Zuteilung von Treibhausgas-Emmissionsberechtigungen in der Zuteilungsperiode 2005 bis 2007 (Zuteilungsverordnung 2007 – ZuV 2007) (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2004d)

4 Elfte Verordnung zur Durchführung des Bundes-Immissionsschutzgesetzes (Verordnung über Emissionserklärungen und Emissionsberichte - 11. BImSchV) (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2004a)

5 Kostenverordnung zum Treibhausgas-Emissionshandelsgesetz und zum Zuteilungsgesetz 2007 (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2004b)

6 Directive 2004/101/EC of the European Parliament and of the Council of 27 October 2004 amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol's project mechanisms (European Parliament and Council of the European Union, 2004b)

7 Gesetz über projektbezogene Mechanismen nach dem Protokoll von Kyoto zum Rahmenübereinkommen der Vereinten Nationen über Klimaänderungen vom 11. Dezember 1997 (Projekt-Mechanismen-Gesetz – ProMechG) of Sebtember 22^nd 2005 (Bundestag of the Federal Republic of Germany, 2005) latest amended by by Article 170 of Zuständigkeitsanpassungsverordnung of October 31^st 2006 (Bundesministerium der Justiz of the Federal Republic of Germany, 2006)

Gathering Regulation 2012¹ which was decided together with the draft of the NAP for the trade phase 2008-2012² on June 28^th 2006 by the Federal Cabinet. It was intended to allow gathering of the 2003 and 2004 emission data required for the final version of the phase II NAP. In parallel to the examination of NAP II proposal by the Commission, the respective ministry has prepared a draft for the law amending legal basis of Emission Trading with respect to Allocation Period 2008-2012³ which will give the NAP II a legal character as soon as it has been modified in accordance with the EU Commission's conditions for approval in spring 2007.

In this chapter, an overview has been given of the German laws and regulations aimed at or seriously affecting climate protection. Besides the actual legislation on emission trading, the relevant laws on energy taxation and promotion of electricity generation from renewable energy sources and cogeneration have been introduced. These three political instruments have a direct effect on climate protection. A remarkable – but indirect – effect is also caused by the legislation on the liberalisation of the gas and electricity markets. However, even without any further illustration of the respective Power Industry Law⁴, the complexity and the interactions of the laws and regulations aimed at or seriously affecting climate protection should have become evident. To make it explicit once again: all of these instruments penalise the combustion of fossil fuels for heat and electricity generation. The interference of these instruments has been discussed in chapter 2.1.1.5. This evidence for complexity and interference in German legislation stands as the case example for all EU member states. Thus, it should have become evident too that it would go by far beyond the scope of this investigation to provide similar detailing for the remaining 27 EU member states. The horizontal slice in the second part of this chapter will focus on a comparison of the 25 national allocation plans⁵.

As we have seen above, the legislation on emission trading has developed quite rapidly during the last four years. During this period, the national allocation plans of the initially 25 now 27 member states have also been subject to numerous changes. An overview of the currently

1 Verordnung über die Erhebung von Daten zur Aufstellung des nationalen Zuteilungsplans für die Zuteilungsperiode 2008-2012 (Datenerhebungsverordnung 2012 – DEV 2012) of July 11^th 2006 (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2006d)

2 Draft of Nationaler Allokationsplan 2008-2012 für die Bundesrepublik Deutschland of June 28^th 2006 (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2006c)

3 Draft of Gesetz über den nationalen Zuteilungsplan für Treibhausgas-Emissionsberechtigungen in der Zuteilungsperiode 2008 bis 2012 (Zuteilungsgesetz 2012 – ZuG 2012) of October 31^st 2006 (Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit of the Federal Republic of Germany, 2006a)

4 Gesetz über die Elektrizitäts- und Gasversorgung amended by Zweites Gesetz zur Neuregelung des Energiewirtschaftsrechtes, which came into force on July 1^st 2005 (Bundestag and Bundesrat of the Federal Republic of Germany, 2005)

5 Another horizontal slice would be the comparison of national legislation on the promotion of RES (see chapter 4.2.3 and especially Tab. 8 and Tab. 9).

valid versions for the phase 2005-2007 can be found in Appendix 1 and a sketch of the NAPs for the period 2008-2012 in Appendix 2. As of February 2007, 13 NAPs for phase II have been conditionally approved by the EU Commission, most recently the Slovenian on February 5^th 2007. Another eleven have been notified to the Commission as drafts, while approval was still pending, one was published for public consultation, and finally two have not been published by the member states yet.

Each of the national allocation plans outlines in detail the principles of allocation of emissions rights down to the level of installations on about 30 to 150 pages. The recurrent topics are mode of allocation (grandfathering vs. benchmarking), reflection of economic growth, treatment of early actions, new installations and closures. Country-specific additional topics are covered in the NAPs (e.g., reserves for exit from nuclear power in Germany). As all published surveys on national allocations plans that can be found in the Internet (Cozijnsen (2004), COGEN (2004) Climate Action Network Europe (2004), Zetterberg et al. (2004)), are either outdated as they refer to draft versions or do not allow comparability of the NAP's relevant topics, Tab. 1 and Tab. 2 provide an overview of the most important aspects of the phase I NAPs. A detailed discussion of the effects of the values of the topics that appear will follow in the next chapter.

Country Opt in Opt out Allocation mode Charges Early action

bonus Cogeneration

bonus Allocation

target Remarks Austria No No Grandfathering with benchmarking

component

Free (100.0%) Yes Yes Sector

Belgium (Flanders)

No District heating,

transport of natural gas

Benchmarking voluntary

(otherwise reduced grandfathering)

Free (100.0%) Yes Yes Sector

Belgium

(Wallonie) No 4 small energy

installations Grandfathering with benchmarking

component Free (100.0%) No Yes Sector

Belgium

(Brussels) ??? ??? ??? Free (100.0%) ??? ??? Sector Only 2% of Brussels

emissions from industry

Cyprus No No Grandfathering Free (100.0%) No No Installation

Czech Republic No Few small energy installations

Grandfathering Free (100.0%) Yes Yes Sector

Denmark No No Grandfathering

(benchmarking for electricity) Free (95.0%),

auctioning (5.0%) No No Sector

Estonia No No Grandfathering Free (100.0%) ??? ??? Sector

Finland District heating

< 20 MW

No Grandfathering Free (100.0%) No No Sector

France No Few small energy

installations Grandfathering Free (100.0%) No No Sector

Germany No No Grandfathering

(planned emission as exception) Free (100.0%) Yes Yes Total

Greece No No Emission forecast Free (100.0%) No No Total Allocation based on

forecasted emissions

Hungary No No Grandfathering Free (97.5%),

auctioning (2.5%)

Yes No Sector

Ireland No No Grandfathering Free (99.25%),

auctioning (0.75%) No No Sector

(varies by sector, pulp and paper:

grandfathering) Latvia Small

installations on demand

Any installation on

demand Grandfathering Free (100.0%) Yes No Sector

Lithuania ??? ??? Grandfathering

(benchmarking for energy) Free (98.5%),

auctioning (1.5%) No No Sector

Luxembourg ??? ??? Grandfathering Free (100.0%) No Yes Total

Malta No No Grandfathering Free (100.0%) No No Total Only 2 installations on

Malta Netherlands No Installations < 25

kt CO₂ p.a. on demand

Grandfathering Free (100.0%) Yes Yes Sector

Poland No Installations < 5 kt CO2 p.a.

Grandfathering

(benchmarking as exception)

Free (100.0%) Yes Yes Sector

Portugal No No Grandfathering Free (100.0%) No No Sector

Slovakia No No Grandfathering Free (100.0%) No No Sector

Slovenia Energy installations 15…20 MW

No Grandfathering w. benchmarking

component Free (100.0%) Yes Yes Sector

Spain No No Grandfathering Free (100.0%) No Yes Sector

Sweden Energy installations

< 20 MW

No Grandfathering Free (100.0%) No No Total

United

Kingdom No 64 installations in

2005 and 2006 Grandfathering Free (100.0%) No No Sector Growth factors for sectors with relative climate change agreements

Tab. 1: Overview on national allocation plans of all EU 25 countries for phase I (2005-2007) – part I

Country

Compliance factor P&P

Economic

growth New entrants Closures Banking

Total allocation (Mt p.a.)

Balance (allocation

vs. BAU) Remarks Austria 96.4% Yes (sector) Reserve 0.3 Mt p.a., first come first served No allowances for future years,

no ex-post reduction No 33.00 Short Belgium

(Flanders) 100.0% No Reserve, allocated according benchmark No allowances for future years,

no ex-post reduction No 30.92 Short Belgium

(Wallonie)

87.5% No Reserve 0.5 Mt p.a., first come first served ??? No 28.11 Short

Belgium (Brussels)

??? ??? ??? ??? No 4.13 Short Only 2% of emissions

from industry Cyprus 100.0% Yes (total) No reserve for unplanned new entrants ??? No 5.70 Long

Czech

Republic 100.0% Yes (sector) Reserve 0.67 Mt p.a. ??? No 107.88 Long Denmark 100.0% Yes (electricity

exports)

Reserve 1.0 Mt p.a. No allowances for future years, no ex-post reduction

No 33.50 Short

Estonia 100.0% Yes (sector) Reserve 0.65 Mt p.a. ??? No 21.59 Long

Finland 94.7% No Reserve 0.83 Mt p.a., allocated according

benchmark No allowances for future years,

no ex-post reduction No 45.50 Short France 96.8% Yes (sector) Reserve 1.1 Mt p.a. No allowances for future years,

no ex-post reduction

Yes 126.30 Short

Germany 97.1% No Reserve 9.0 Mt p.a., compliance factor 1.0 for 14 years, transfer from old install.

possible

No allowances for future years, ex-post reduction if production falls below 60% of base years

No 503.00 Short

Greece 100.0% Yes (sector) Reserve 0.13 Mt p.a., transfer from old

install. possible No allowances for future years,

no ex-post reduction No 74.42 Short Hungary 100.0% Yes (sector) Reserve 0.6 Mt p.a., allocated according

benchmark No allowances for future years,

no ex-post reduction No 29.90 Long

Ireland 100.0% No Reserve 0.3 Mt p.a., allocated according projected emissions, first come first served

No allowances for future years, no ex-post reduction

No 22.32 Short

benchmark, transfer from old installation

possible in most sectors hardly ex-post reduction Latvia 100.0% No Reserve, allocated according benchmark,

first come first served ??? ??? 4.57 Long

Lithuania 75.0% Yes (total) Reserve 0.67 Mt p.a., allocated according to BAT, first come first served, transfer from old installation not possible

No allowances for future years,

no ex-post reduction ??? 12.27 Long

Luxem-bourg

91.0% No Reserve 0.4 Mt p.a., allocated according benchmark, compliance factor 1.0, transfer from old installation possible

No allowances for future years, no ex-post reduction

??? 3.52 Short

Malta 100.0% Yes (sector) Reserve 0.75 Mt p.a. ??? ??? 2.94 Long Only 2 installations

Nether-lands 97.0% Yes (sector) Reserve 4.0 Mt p.a., first come first served ??? No 98.30 Short Poland 100.0% Yes (sector) Sectoral reserves total at 3.26 Mt p.a.,

allocated according benchmark, transfer from old installation possible

No allowances for future years, no ex-post reduction

Yes 286.19 Long Banking only with Polish allowances

Portugal 100.0% Yes (total) Reserve 3.1 Mt p.a., allocated according benchmark, first come first served, transfer from old installation possible

No allowances for future years, no ex-post reduction

No 38.90 Short

Slovakia 100.0% Yes (sector) Reserve 0.15 Mt p.a., allocated according

benchmark, first come first served ??? No 30.50 Long

Slovenia 95.8% No Reserve 0.7 Mt p.a., allocated according benchmark, first come first served, transfer from old installation possible

No allowances for future years,

no ex-post reduction ??? 8.78 Short

Spain 100.0% Yes (sector) Reserve 5.42 Mt p.a. allocated according benchmark, first come first served

No allowances for future years, no ex-post reduction

No 172.31 Short

Sweden 100.0% No Reserve 1.8 Mt p.a., allocated according

benchmark, first come first served ??? ??? 22.90 Short

United

Kingdom 100.0% Yes (sector) Reserve 15.6 Mt p.a., allocated according benchmark, first come first served, transfer from old installation not possible

No allowances for future years,

no ex-post reduction ??? 245.43 Short Opt out to align with UK emission trading scheme

Tab. 2: Overview on national allocation plans of all EU 25 countries for phase I (2005-2007) – part II

Summarizing the comparison of the national allocation plans for phase I (2005-2007) in a few sentences, the basic findings are the following:

• The possibilities of opting-in and opting-out have been used to a negligible extent by a few member states only

• Grandfathering is the predominant mode of allocation, benchmarking is at most used as an additional component

• Almost all certificates are allocated for free, auctioning of allowances can be neglected

• Early actions and CHP are fostered by additional allocation in about a third of the member states

• Economic growth is reflected in most member states; growth factors are applied for total allocation, for sectoral allocation or for individual allocation

• New entrants will receive certificates for free, according to BAT-benchmarks in nearly all member states

• In the case of closure of installations, the certificates for the subsequent years have to be handed back to the authorities

• Total annual allocation for phase I about 2,200 Mt CO2

• Installations located in Eastern Europe are better off due to a tendency of over-allocation to these countries

As noted above, following EU Directive 2003/87/EC¹ the member states needed to submit their drafts of phase II NAPs to the Commission by September 30^th 2006. Although not all member states have met this obligation, most of the 27 required NAP drafts have been presented to the EU. 13 have been conditionally approved, the member states are currently implementing the conditions and preparing the respective legal acts, another eleven have been notified to the Commission, while approval was still pending, one was published for public consultation, and finally two have not been published by the member states yet.

Im Dokument The Effects of Emission Trading on the Pulp and Paper Industry in Europe (Seite 56-68)